Withholding Certificate for Pension or Annuity Payments NC-4P

Withholding Certificate for
Pension or Annuity Payments
NC-4P
Web
11-13
!
North Carolina Department of Revenue
Important: You must complete a new Form NC-4P for tax year 2014. As a result of recent law changes, how you determine
the number of allowances for tax year 2014 will differ from previous years. Most taxpayers will not be entitled to as many
allowances, and as a result, more taxpayers should claim zero (0) allowances. Additionally, you are no longer allowed to
claim a N.C. withholding exemption for yourself, your spouse, your children, or any other qualifying dependents.
PURPOSE. Form NC-4P is for North
Carolina residents who are recipients of
income from pensions, annuities, and certain
other deferred compensation plans. Use
the form to tell payers whether you want
any State income tax withheld and on what
basis. You can also use the form to choose
not to have State income tax withheld.
However, you cannot make this choice for
eligible rollover distributions. The method
and rate of withholding depends on whether
the payment you receive is a periodic
payment or a nonperiodic distribution. This
form is also to be used by a nonresident with
a North Carolina address to indicate that no
tax is to be withheld from pension payments.
PERIODIC PAYMENTS. Withholding from
periodic payments of a pension or annuity is
figured in the same manner as withholding
from wages. Periodic payments are made
in installments at regular intervals over a
period of more than one year. They may
be paid annually, quarterly, monthly, etc.
If you want State income tax withheld,
you should complete the Form NC-4P
Allowance Worksheet. You can designate
an additional amount to be withheld on line 3
of Form NC-4P. Submit the completed form
to your payer. If you do not submit Form NC4P to your payer, the payer must withhold
on periodic payments as if you are married
claiming three withholding allowances.
Caution: If you furnish a pension payer a
Withholding Certificate for Pension or
Annuity Payments that contains information
which has no reasonable basis and results in
a lesser amount of tax being withheld than
would have been withheld had you furnished
reasonable information, you are subject to a
penalty of 50% of the amount not properly
withheld. You may be subject to interest for
underpayment of estimated income tax, that
applies for not paying enough tax during the
year, either through withholding or estimated
tax payments. New retirees should see
Form NC-40, Individual Estimated Income
Tax, for details on the estimated income tax
requirements. You may be able to avoid
quarterly estimated income tax payments
by having enough tax withheld from your
pension or annuity using Form NC-4P.
For periodic payments, your Form NC-4P
stays in effect until you change or revoke it.
Your payer must notify you each year of your
right to choose not to have State income tax
withheld or to revoke your election.

NC-4P
Web
11-13
NONPERIODIC DISTRIBUTIONS - 4%
WITHHOLDING. Your payer must withhold
a flat 4% from a nonperiodic distribution
unless you choose not to have income
tax withheld. A nonperiodic distribution
means any distribution which is not a
periodic payment. (The 4% withholding
is required on eligible rollover distributions
and you cannot choose not to have income
tax withheld from those distributions.)
Distributions from an IRA that are payable
on demand are treated as nonperiodic
distributions. The election to withhold
from nonperiodic distributions applies on
a distribution by distribution basis. If you
choose not to have tax withheld from a
nonperiodic distribution, you should check
the box on line 1 of Form NC-4P and submit
the completed form to your payer.
MISSING OR INCORRECT TAXPAYER
IDENTIFICATION NUMBER. If you submit
an NC-4P that does not contain the taxpayer
identification number, or if the identification
number is incorrect, the payer cannot honor
your request not to have income tax withheld.
The payer must withhold on periodic
payments as if you are married claiming
three withholding allowances. Withholding
on nonperiodic distributions will be at the
4% rate.
REVOKING YOUR “NO WITHHOLDING”
CHOICE. If you previously chose not to
have State income tax withheld on either
periodic or nonperiodic payments, complete
another NC-4P and submit to your payer.
Write “Revoked” next to the check box on
line 1 of the form and tax will be withheld at
the rate set by law.
IMPORTANT. Government retirees whose
income is exempt from State tax as a result
of the Bailey Settlement should choose no
withholding by checking the box on line 1 of
Form NC-4P.

Cut here and give this certificate to your employer. Keep the top portion for your records.
North Carolina Department of Revenue
Withholding Certificate for Pension or Annuity Payments
Type or print your first name and middle initial
Home address (number and street or rural route)
City or town, state, and ZIP code
Last name
Your social security number
Claim or identification number
(if any) of your pension or
annuity contract
Complete the following applicable lines:
1 Check here if you do not want any State income tax withheld from your pension or annuity. (Do not complete lines 2 or 3.)
2 Total number of allowances you are claiming for withholding from each periodic
pension or annuity payment. (You may also designate an additional dollar amount on line 3.)................................
Marital status:
Single
Married or Qualifying Widow(er)
Head of Household
3 Additional amount, if any, you want withheld from each pension or annuity payment. Note: For periodic payments
you cannot enter an amount here without entering the number (including zero) of allowances on line 2..................
Your Signature
Date
(Enter number
of allowances)
$
NC-4P Allowance Worksheet
!
Part I
Important: You must complete a new Form NC-4P for tax year 2014. As a result of recent law changes, how you
determine the number of allowances for tax year 2014 will differ from previous years. Most taxpayers will not be
entitled to as many allowances, and as a result, more taxpayers should claim zero (0) allowances. Additionally, you
are no longer allowed to claim a N.C. withholding exemption for yourself, your spouse, your children, or any other
qualifying dependents.
For tax year 2014, answer all of the following questions for your filing status. Because N.C. does not recognize
same-sex marriages, same-sex couples who file married for federal purposes must complete this worksheet as single,
or if qualified, head of household or qualifying widow(er).
Single 1. Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $10,000? 2. Will you have adjustments or deductions from income from Page 3, Schedule 2?
3. Will you be able to claim any N.C. tax credits or tax credit carryovers from
Page 4, Schedule 4?
Yes oNo
o
Yes oNo
o
Yes oNo
o
If you answered “No” to all of the above, STOP HERE and enter ZERO (0) as total allowances on Form NC-4P, Line 2.
If you answered “Yes” to any of the above, you may choose to go to Page 2, Part II to determine if you qualify for
additional allowances. Otherwise, enter ZERO (0) on Form NC-4P, Line 2.
Married Filing Jointly 1.
2.
3.
4.
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $17,500?
Will you have adjustments or deductions from income from Page 3, Schedule 2?
Will you be able to claim any N.C. tax credits or tax credit carryovers from
Page 4, Schedule 4?
Will your spouse receive combined wages and taxable
pensions of less than $5,000 or only retirement benefits not subject to N.C. income tax?
Yes oNo
o
Yes oNo
o
Yes oNo
o
Yes oNo
o
If you answered “No” to all of the above, STOP HERE and enter ZERO (0) as total allowances on Form NC-4P, Line 2.
If you answered “Yes” to any of the above, you may choose to go to Page 2, Part II to determine if you qualify for
additional allowances. Otherwise, enter ZERO (0) on Form NC-4P, Line 2.
Married Filing Separately 1.
2.
3.
Will your portion of N.C. itemized deductions from Page 3, Schedule 1 exceed $10,000? Yes oNo
o
Will you have adjustments or deductions from income from Page 3, Schedule 2?
Yes oNo
o
Will you be able to claim any N.C. tax credits or tax credit carryovers from
Page 4, Schedule 4?
Yes oNo
o
If you answered “No” to all of the above, STOP HERE and enter ZERO (0) as total allowances on Form NC-4P, Line 2.
If you answered “Yes” to any of the above, you may choose to go to Page 2, Part II to determine if you qualify for
additional allowances. Otherwise, enter ZERO (0) on Form NC-4P, Line 2.
Head of Household1.
2.
3.
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $14,500?
Will you have adjustments or deductions from income from Page 3, Schedule 2?
Will you be able to claim any N.C. tax credits or tax credit carryovers from
Page 4, Schedule 4?
Yes oNo
o
Yes oNo
o
Yes oNo
o
If you answered “No” to all of the above, STOP HERE and enter ZERO (0) as total allowances on Form NC-4P, Line 2.
If you answered “Yes” to any of the above, you may choose to go to Page 2, Part II to determine if you qualify for
additional allowances. Otherwise, enter ZERO (0) on Form NC-4P, Line 2.
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1
NC-4P Allowance Worksheet
Qualifying Widow(er) 1. 2.
3.
Will your N.C. itemized deductions from Page 3, Schedule 1 exceed $17,500?
Will you have adjustments or deductions from income from Page 3, Schedule 2?
Will you be able to claim any N.C. tax credits or tax credit carryovers from
Page 4, Schedule 4?
Yes oNo
o
Yes oNo
o
Yes oNo
o
If you answered “No” to all of the above, STOP HERE and enter THREE (3) as total allowances on Form NC-4P, Line 2.
If you answered “Yes” to any of the above, you may choose to go to Part II to determine if you qualify for additional
allowances. Otherwise, enter THREE (3) on Form NC-4P, Line 2.
NC-4P Part II
$
.
1. Enter your total estimated 2014 N.C. itemized deductions from Page 3, Schedule 1.............................................1.________________________
2. Enter the applicable
N.C. standard deduction
based on your filing status. {
$ 7,500 if single
$15,000 if married filing jointly or qualifying widow(er)
$ 7,500 if married filing separately
$
.
$12,000 if head of household ..................................................................2.________________________
$
.
3. Subtract line 2 from line 1. If line 1 is less than line 2, enter ZERO (0)..................................................................3.________________________
4. Enter an estimate of your total 2014 federal adjustments to income and State deductions from
$
.
federal adjusted gross income from Page 3, Schedule 2........................................................................................4.________________________
$
.
5. Add lines 3 and 4 .................................................................................................................................................5.________________________
$
.
6. Enter an estimate of your 2014 nonwage income (such as dividends or interest).... 6.______________________
7. Enter an estimate of your 2014 State additions to federal adjusted gross
$
.
income from Page 3, Schedule 3........................................................................... 7._______________________
$
.
8. Add lines 6 and 7 .................................................................................................................................................8.________________________
$
.
9. Subtract line 8 from line 5 (Do not enter less than zero)........................................................................................9.________________________
0. Divide the amount on line 9 by $2,500 . Round down to whole number................................................................10. ________________________
1
Ex. $3,900 ÷ $2,500 = 1.56 rounds down to 1
$
11. Enter the amount of your estimated N.C. tax credits from Page 4, Schedule 4... 11._______________________
.
12. Divide the amount on line 11 by $145. Round down to whole number.................................................................12. ________________________
Ex. $200 ÷ $145 = 1.38 rounds down to 1
3. If filing as single, head of household, or married filing separately, enter zero (0) on this line.
1
If filing as qualifying widow(er), enter 3.
If filing as married filing jointly, enter the appropriate number from either (a), (b), (c), or (d) below.
(a)
(b)
(c)
(d)
Your spouse expects to have zero wages and expects to receive retirement benefits that will all be nontaxable
for N.C. purposes, enter 3. (Nontaxable retirement benefits include: Bailey, Social Security, and Railroad
retirement)
Your spouse expects to have combined wages and taxable pensions of more than $1, but less than $2,500,
enter 2.
Your spouse expects to have combined wages and taxable pensions of more than $2,500 but less than
$5,000, enter 1.
Your spouse expects to have combined wages and taxable pensions of more than
$5,000, enter 0..............................................................................................................................................13. ________________________
14. Add lines 10, 12, and 13, and enter the total here...................................................................................................14. ________________________
5. If you completed this worksheet on the basis of married filing jointly, the total number of allowances determined
1
on line 14 may be split between both spouses, however, they so choose. Enter the number of allowances
from line 14 that your spouse plans to claim...........................................................................................................15. ________________________
6. Subtract line 15 from line 14 and enter the total number of allowances here and on line 2 of your
1
Form NC-4P, Withholding Certificate for Pension or Annuity Payments.........................................................16. ________________________
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2
NC-4P Allowance Worksheet Schedules
Important: If you cannot reasonably estimate the amount to enter in the schedules below, you should enter ZERO (0) on line 2, NC-4P.
Schedule 1
Estimated 2014 N.C. Itemized Deductions
Qualifying mortgage interest
__$_________________
.
Real estate property taxes
__$_________________
.
Total qualifying mortgage interest and real estate property taxes*
__$_________________
.
Charitable Contributions (Same as allowed for federal purposes)
__$_________________
.
Total estimated N.C. itemized deductions. Enter on Page 2, Part II, Line 1
__$_________________
.
*The sum of your qualified mortgage interest and real estate property taxes may not exceed $20,000. For married
taxpayers, the $20,000 limitation applies to the combined total of qualified mortgage interest and real estate property
taxes claimed by both spouses, rather than to each spouse separately.
Schedule 2
Estimated 2014 Federal Adjustments to Income
Federal adjustments to income are the amounts that are deducted from total income claimed on your federal return.
Adjustments to income may include:
Health savings account deduction
__$_________________
.
Moving expenses
__$_________________
.
Alimony paid
__$_________________
.
IRA deduction
__$_________________
.
Student loan interest deduction
__$_________________
.
Certain business expenses of reservists, performing artist,
and fee-basis governmental officials
__$_________________
.
Total Federal Adjustments to Income
.
__$_________________
Estimated 2014 State Deductions from Federal
Adjusted Gross Income to Consider for NC-4P Purposes
20% of prior bonus depreciation addback __$_________________
.
20% of prior section 179 addback __$_________________
.
Amount by which North Carolina basis of property exceeds
federal basis of property - in year taxpayer disposes of property
__$_________________
.
Total State Deductions from Federal Adjusted Gross Income
__$_________________
.
(Do not consider any amount of the portion of Bailey Retirement
Benefits, Social Security Benefits, or Railroad Retirement Benefits
included in Adjusted Gross Income.)
Total Federal Adjustments to Income and State Deductions from Federal Adjusted
Gross Income. Enter on Page 2, Part II, Line 4
Schedule 3
__$_________________
.
Estimated 2014 State Additions to Federal
Adjusted Gross Income to Consider for NC-4P Purposes
Shareholder’s share of built-in gains tax that the S corporation paid for federal income tax purposes
Amount by which federal basis of property exceeds NC basis of property – in year taxpayer
disposes of property
Amount of gross income from domestic production activities that a taxpayer excludes
from gross income under section 199 of the Internal Revenue Code
Total State Additions to Federal Adjusted Gross Income. Enter on Page 2, Part II, Line 7
__$_________________
.
__$_________________
.
__$_________________
.
__$_________________
.
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NC-4P Allowance Worksheet Schedules
Schedule 4
Estimated 2014 N.C. Tax Credits
__$_________________
.
Tax Credit for Income Taxes Paid to Other States by Individuals Credit for Children
A taxpayer who is allowed a federal child tax credit under section 24 of the Internal Revenue Code is allowed a tax credit
for each dependent child unless adjusted gross income exceeds the threshold amount shown below.
The credit can be claimed only for a child who is under 17 years of age on the last day of the year.
No. of
Children
Credit Amount per
Qualifying Child
Estimated
Credit
Filing Status
Adjusted Gross Income
Single
Up to $20,000
Over $20,000 and up to $50,000
Over $50,000
Married Filing Jointly or
Qualifying Widow(er) $
Up to $40,000
___________$125
____________
.
$
Over $40,000 and up to $100,000 ___________$100
____________
.
$
Over $100,000
___________$0 ____________
.
Head of Household
Up to $32,000
Over $32,000 and up to $80,000
Over $80,000
Married Filing Separately
$
___________$125
____________
. $
___________$100
____________
.
$
___________$0 ____________
.
$
___________$125
____________
.
$
___________$100
____________
.
$
___________$0 ____________
.
Up to $20,000
___________ $125
__$___________
.
$
Over $20,000 and up to $50,000 ___________$100
____________
.
$
Over $50,000 ___________$0 ____________
.
Additional Tax Credits and Carryovers
G.S.105-129.16A, Credit for Investing in Renewable Energy Property
G.S.105-129.16H, Credit for Donating Funds to a Nonprofit Organization or Unit of State or
Local Government to Enable the Nonprofit or Government Unit to Acquire Renewable
Energy Property
G.S.105-151.29, Credit for Qualifying Expenses of a Production Company G.S.105-129.35, Credit for Rehabilitating Income-Producing Historic Structure
G.S.105-129.36, Credit for Rehabilitating Nonincome Producing Historic Structure
G.S.105-129.42, Credit for Low-Income Housing Awarded a Federal Credit Allocated on or
after January 1, 2003
G.S.105-129.55, Credit for North Carolina Research & Development
G.S.105-129.71, Credit for Income Producing Rehabilitated Mill Property
G.S.105-129.72, Credit for Non-income Producing Rehabilitated Mill Property
G.S.105-129.96, Credit for Constructing a Railroad Intermodal Facility
G.S.105-163.011, Tax Credits for Qualifying Business Investments
Tax Credit Carryover from previous years
Total Tax Credits and Carryovers. Enter on Page 2, Part II, Line 11
__$
_______________
.
__$
_______________
.
__$
_______________
. __$
_______________
.
__$
_______________
. __$
_______________
. __$
_______________
. $
_________________
. __$
_______________
. __$
_______________
.
__$
_______________
. __$
_______________
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4
Multiple Jobs Table
Find the amount of your estimated annual wages from your lowest paying job(s) in the left hand column. Follow across to
find the amount of additional tax to be withheld for each pay period. Enter the additional amount to be withheld on line 3 of
your Form NC-4P.
Additional Withholding for Single, Married, or Qualifying Widow(er) with Multiple Jobs
Estimated Annual Wages
Payroll Period
At Least But Less Than Monthly Semimonthly Biweekly Weekly
0
1000 2.00 1.00 1.001.00
1000
2000 7.00 4.00 3.002.00
2000
3000 12.00 6.00 6.003.00
3000
4000 17.00 8.00 8.004.00
4000
5000 22.00 11.00 10.005.00
5000
6000 27.00 13.00 12.006.00
6000
7000 31.00 16.00 15.007.00
7000Unlimited 36.00 18.00 17.00 8.00
Additional Withholding for Head of Household Filers with Multiple Jobs
Estimated Annual Wages
Payroll Period
At Least But Less Than Monthly Semimonthly Biweekly Weekly
0
1000 2.00 1.00 1.001.00
1000
2000 7.00 4.00 3.002.00
2000
3000 12.00 6.00 6.003.00
3000
4000 17.00 8.00 8.004.00
4000
5000 22.00 11.00 10.005.00
5000
6000 27.00 13.00 12.006.00
6000
7000 31.00 16.00 15.007.00
7000
8000 36.00 18.00 17.008.00
8000
9000 41.00 21.00 19.009.00
9000
10000 46.00 23.00 21.0011.00
10000
11000 51.00 25.00 23.0012.00
11000
12000 56.00 28.00 26.0013.00
12000 Unlimited 58.00 29.00 27.0013.00
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